Key Stats for Toast Stock
- 52-Week Range: $24 to $50
- Current Price: $29
- Street Mean Target: $36
- Street High Target: $51
- TIKR Model Target (Dec. 2030): $63
What Happened?
Toast, Inc. (TOST), the restaurant operating system powering point-of-sale, payments, payroll, and ordering for over 164,000 locations, ended 2025 with its strongest location growth ever while Toast stock trades near its 52-week floor.
The company added a record 30,000 net locations in 2025, including 8,000 in Q4, lifting annual recurring revenue (ARR, the total annualized value of active subscription contracts) 26% to $2.05 billion.
That location momentum is translating directly into financial scale: full-year revenue reached $6.15 billion, up 24%, with subscription services revenue jumping 33% to $936 million as restaurants adopted more products across the platform.
Toast is not growing by discounting; it is growing by becoming indispensable, with ToastIQ, its conversational AI assistant embedded inside the platform, already adopted by more than half of all 164,000 locations within four months of launch.
Aman Narang, CEO, stated on the Q4 2025 earnings call that “we are positioned to drive durable growth from over $2 billion in the ARR today to $5 billion and $10 billion and beyond,” anchoring that path to a record enterprise pipeline and ARR doubling in retail, international, and enterprise combined in 2025.
Emerging TAMs (total addressable markets) including international markets in Canada, the U.K., Ireland, and Australia, enterprise chains like Applebee’s and Firehouse Subs, and a fast-scaling food-and-beverage retail segment are each growing faster than the core U.S. SMB restaurant business was at comparable stages, pointing toward another year of record net location adds in 2026.
Wall Street’s Take on TOST Stock
Record location adds heading into 2026 convert directly into recurring gross profit, where Toast’s incremental margins are already strong enough to fund simultaneous TAM expansion without eroding profitability.
TOST’s revenue is expected to reach $7.39 billion in 2026, up roughly 20% on top of 24% actual growth in 2025, with EBITDA projected to climb toward $785 million as the company scales toward its 40% long-term adjusted margin target.
Seventeen of 28 analysts currently rate Toast stock a buy or strong buy against 11 holds and zero sells, with a median 12-month price target of $45 implying roughly 55% upside from current levels, as Wall Street waits for enterprise rollouts and the drive-thru product launch to demonstrate material contribution.
The spread between the median target of $45 and high-end estimates above $60 reflects a genuine fork: the lower end prices in near-term EBITDA headwinds from memory chip costs and tariffs (guided at roughly 150 basis points of negative impact in 2026), while the upper end assumes enterprise and retail scale into double-digit ARR contributors ahead of schedule.
Priced at roughly 22x 2026 consensus EPS against projected earnings growth of around 29%, Toast stock appears undervalued: the same earnings stream commanded 36x to 50x as recently as late 2025, and the compression reflects AI software sector fear rather than any deterioration in location growth, ARR, or free cash flow, which came in at $608 million for the full year.
ToastIQ’s 50%-plus location adoption rate in under four months signals a platform stickiness that most restaurant software competitors cannot match, and the integration with Instacart announced in February opens an incremental revenue channel for retail customers without requiring new headcount.
GPV per location (the gross payment volume each restaurant processes, the base for fintech revenue) has been roughly flat year over year for several quarters; if consumer spending weakens materially, fintech revenue could slow faster than new location adds can offset.
Q1 2026 results, expected in May, will test whether recurring gross profit growth lands within the guided 22% to 24% range and whether the drive-thru product launch timeline holds as the key catalyst for the QSR enterprise segment, which represents roughly 70% of the total enterprise TAM.
What Does the Valuation Model Say?
The TIKR mid-case model assigns a target of around $63 to Toast stock by year-end 2030, implying a 121% total return over roughly 4.7 years at an annualized rate of around 18%, built on a revenue CAGR of ~13% and net income margins expanding toward 11%.
At around $29 per share against a consensus EPS growth trajectory of around 29% in 2026 and 27% in 2027, Toast stock is undervalued: the forward multiple has compressed to roughly 22x while the underlying growth rate has not deteriorated, creating a meaningful gap between price and fundamental trajectory.
The core tension in the investment case is straightforward: Toast is executing at a high level in its core business, but the market’s re-rating depends on the emerging TAMs, enterprise and retail above all, moving from “fast-growing but small” to “material contributors” without the unit economics deteriorating during the scaling phase.
What Has to Go Right
- Enterprise rollouts at Applebee’s, Firehouse Subs, and Papa Murphy’s ramp to full ARR contribution, and the 2026 drive-thru product launch opens the 70% of QSR enterprise locations that were previously unreachable, validating a $10 billion-plus ARR long-term target
- ToastIQ adoption converts from free usage into usage-based monetization, adding a durable ARPU expansion layer on top of mid-single-digit SaaS ARPU growth already running above the company average in the core SMB segment
- GPV per location stabilizes around current levels as restaurant traffic holds, protecting the $195 billion gross payment volume base that generated $608 million in free cash flow in 2025
- International markets in Canada, the U.K., Ireland, and Australia reach rep productivity comparable to the U.S. core, where Toast already powers 20% of SMB and mid-market restaurants and continues to gain share in its most penetrated markets
What Could Go Wrong
- Memory chip costs, guided at 150 basis points of incremental headwind in 2026 and weighted toward the second half, compound with tariff exposure to compress hardware margins further if global chip demand stays elevated into 2027
- AI-native entrants target the SMB restaurant segment with lower-cost point-of-sale alternatives, exploiting the gap between Toast’s broad platform and the simpler needs of smaller, independent operators
- Enterprise sales cycles stretch beyond expectations in QSR, where the drive-thru product is a first-generation launch, delaying the TAM expansion thesis by 12 to 18 months and capping net location growth in 2026 below the guided record-setting trajectory
- EBITDA guidance of around $775 to $795 million leaves limited buffer for GPV softness; any sustained deceleration in same-store transaction volume flows directly into fintech revenue before cost reductions can offset the impact
Should You Invest in Toast, Inc.?
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Pull up TOST stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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